AFT Pharmaceuticals Limited (AFT) Earnings Call Transcript & Summary

Good morning, and welcome to AFT Pharmaceutical Limited's 2025 Annual Meeting. I'm David Flacks, Chair of AFT. I'd first like to draw your attention to this important notice on the presentation, which, along with my prepared remarks and the slide presentation has been released to both the NZX and ASX this morning. and will also be lodged on our website. On behalf of the Board, thank you for attending the 2025 Annual Meeting. We have this year again, enabled the option to join the meeting via webcast, and we extend our thanks to those who have joined by this means. Before we start, a couple of housekeeping points. I'd be grateful if you could make sure that your phone is on silent. And in the event of an emergency, please make your way to that door over there. and follow the instructions of the staff. Let me begin by introducing you to our directors. So Hartley Atkinson, who's going to be presenting to you shortly; Marree Atkinson, Ted Witek, who's come away from Canada for the meeting; Andrew Lane is unable to attend the meeting today, and he's in Europe, but he is spending online, but does send his apologies to shareholders; and our new Independent Director, Alisson Yorston, who joined the AFT Board in November last year. Allison will address you later in the meeting prior to the resolution for her appointment as a director. Also joining us today are our auditors, lot with Bryce Henderson and Rebecca Clark, and we're available to answer any questions later in the meeting, if you have any. Our lawyers, Harmos Horton Lusk, are also here. I'd like to introduce you to some of our senior management team who are here today. Could you stand up, as I mentioned your name, please. Malcolm Tubby, CFO and Company Secretary; Iona Stanescu, Chief Scientific Officer; Vladimir Ilievski, Regulatory Affairs Manager; Louise Clayton, our Director, International Business; and Scott Porter, national sales manager in New Zealand. Our General Manager of Promoted Products, Scott Crawford, and our Group Marketing Manager, Mary Keith, could not be us today. Just going to go ask for a moment here. This management team together working with AFT for quite a while. They're a terrific hard-working team and the fact that they've been with us for so long is a testament to the culture within AFT, and in particular, to Hartley and Marree. You can find details of all directors and the senior management team in our annual report and on our website. So today's agenda, the company's constitution prescribes a quorum of 5 shareholders. As you can see, this requirement has been met. Accordingly, I declare the meeting formally open. The items of business for this meeting and the resolutions to be considered by shareholders are contained in the Notice of Meeting, which was sent to shareholders on the 27th of June. In terms of the order of the meeting, I'm going to say a few words following which AFT's Founder and Managing Director, Hartley Atkinson, will give his presentation. We will then consider the formal business and resolutions of the meeting. In relation to the resolutions, there will be opportunities for shareholders to ask questions as we address each resolution in the formal part of the meeting. And there will also be an opportunity to ask general questions after Hartley has his presentation. At the close of the meeting, please you'll be able to join us for refreshments. It's my pleasure to report another strong year for AFT marked by continued growth strengthened financial performance and significant strategic advances in key global markets. Our achievements this year reflect the robust foundations we've established for our net crops and extend our long-standing record for uninterrupted growth. Firstly, I'm pleased to report that this year, our revenues up us a significant milestone of $200 million for the first time, achieving total sales of $208 million. Our core Australasian business remains robust and continues to be the cornerstone of our financial strength, with Australia and New Zealand collectively delivering sales of $181 million. The strength of these markets positions us well as we advance towards our ambitious goal of reaching $300 million for the 2027 financial year. Geographically, we have significantly expanded our presence and market capabilities in strategically important regions, including North America, Europe, Asia and Africa. Our operations in the U.K., Europe, the U.S., Canada and South Africa have moved from establishment to development. And these global hubs position us effectively to capitalize on substantial commercial opportunities in those markets while also mitigating risks associated with reliance on any single market or territory. We're particularly excited about our potential in North America. In the U.S., the world's largest pharmaceutic the market, we've launched both the intravenous and tablet form of our pain relief, Medicine Maxigesic, which is marketed as Combogesic in North America. We've also restructured our distribution arrangements in the United States, which we believe will maximize both the commercial and patient care benefits that come with following the intravenous form of the pain relief medicine in postoperative care with the Combogesic rapid tablet form of the medicine. We have also just begun in July, sales of Maxigesic IV in Canada. Together as the North American market of the United States and Canada offers a combined addressable market opportunity in excess of USD 8 billion. We are making progress globally, both with our operational hubs and through our distribution arrangements. Progress has been slower than planned, but we are working hard to increase sales and are confident that we will see significant revenue growth across both distribution channels over the next 12 to 18 months. In line with our geographic expansion, our product development pipeline remains dynamic and offers diverse products that are progressing well towards market readiness. We have 8 patented products in active research and development. an improved migraine treatment formulation, and we're progressing 24 off-patent injectables in several markets, including through our global hubs. These products collectively offer significant global market opportunities. We also have 5 advanced research and development programs now entering commercialization across multiple international markets. These include multiple forms of Maxigesic, our antibacterial cream, Crystaderm; Micolette, our micro-enema for bowel construction; capsaicin cream for treatment of osteoarthritis pain and neuropathic pain; and Kiwisoothe tablets and sachets. Together, these products demonstrate our continued capability to develop innovative health care solutions that meet real clinical needs globally. We believe that our investment in research and development will lead to significant opportunities and Harley will discuss these in more detail in his presentation. Again, just going off script briefly. We had our Board Strategy Day a couple of days ago, earlier this week. And we all, as a Board, got really excited as we went through this R&D pipeline and program. There's plenty of hard work ahead of us, but the opportunities are amazing. Financially, we've had -- we've balanced these strategic investments with continued enhancement of our financial position. Despite sustained investment in our future growth, we have consistently increased shareholder equity while also managing our net debt. Specifically, our net debt at year-end reduced to $14.5 million from $16.2 million in the prior year, well within our targeted range. Reflecting the strength of our financial position and your Board's confidence in our future outlook, we've declared an increased dividend of $0.018 per share, up from $0.06 per share the previous year. I want to comment on our share price performance. We do not believe the current share price reflects our considerable achievements. The company's decades long record of growth. The depth of our development portfolio nor the considerable potential we see as the company establishes a stronger presence around the world. We understand some of the reasons for the share price. We've experienced some unexpected headwinds such as the client destocking and adopted strike that disrupted first half earnings in the 2025 financial year. But importantly, this was followed by a strong second half earnings. Overall, we have chosen to invest our earnings into growth projects rather than focus purely on short-term profitability. We make no apology for this. AFT has achieved an enviable record of growth precisely because of our long-term perspective and our commitment to creating enduring value. We are always attentive to finding ways to improve the information that we provide to shareholders so that you can better appreciate our future potential and the rationale for our investments. Today, for instance, as I mentioned earlier, we are releasing more information to our investors on our development portfolio with a goal to better illustrate the value we are creating. We have also this year, begun giving quarterly updates to investors to better illustrate our progress, and we've also initiated an outreach program to enhance investor engagement in Australia. We believe these efforts are gaining some traction. We will continue to focus on growth, both with existing products in a broader range of markets and new products from our R&D pipeline. AFT remains committed to best practice governance standards and operating sustainably. We're developing a significant number of innovative products for patients in real need that larger pharmaceutical companies would likely not undertake. However, these still offer an interesting market opportunity. We have aligned our business and community initiatives with the United Nations sustainable development goals and have focused in particular on the 6 initiatives set out on this slide. More information on each of these priorities is set out in our annual report. This year, we welcomed Allison Yorston to our Board as an Independent Nonexecutive Director. Allison brings over 2 decades of experience in blue chip, fast-moving consumer goods, telecommunications and retail marketing. Her insights and market expertise are making a valuable contribution to the company, and Allison's skill set rounds out our board expertise. The Board hopes you will support her election today. It is, however, with deep sadness that I also acknowledge the passing of our former colleague, Dr. Doug Wilson, earlier this year. Doug served as an independent nonexecutive director from 2012 until his retirement in 2022, significantly influencing AFT's strategic duration and development during a critical period of growth. Doug was widely recognized for his expertise in pharmaceutical innovation and health care development. And beyond his contributions to AFT, he was also a celebrated broadcaster, author and a respective member of our wider community. His wisdom, experience and friendship will be deeply missed by all who had the pleasure of working alongside him, and we sincerely appreciated his guidance. As we look ahead, we remain optimistic despite the complexities of the global trading environment. Our geographic diversification, robust product pipeline and solid market positioning provide us with a strong foundation to continue our trajectory of sustainable growth. Our target revenue goal of $300 million for FY '27 is ambitious, but we believe it is achievable, supported by ongoing significant investments into market expansion. In closing, I wish to extend my sincere thanks to my fellow Board members for their support and guidance. I'd also like to thank our CEO, Hartley Atkinson; our Chief of Staff, Maree Atkinson, our executive team and our hard-working diverse and committed employees whose tireless efforts have made these achievements possible. Lastly, many thanks to you, our shareholders, for your continued confidence, support and trust in our vision and strategic direction. I will now invite Hartley to discuss our performance and prospects in greater detail. Thank you.

Thanks, David. Thanks, everyone. Look, I'd just like to run through a few slides and explain some of the projects we're working on. So obviously, in terms of the sales side, this sort of gives you a snapshot and an idea what our progress has been. I mean, effectively, if you look at the graph on the left, I still do very much believe we're a growth stock. It's interesting to notice, sometimes we see various forecasts and analyst models. And often they have our growth leveling off. I don't know where they get that from is certainly not going to happen as far as I'm concerned and as far as our company is working towards. Last year, as David mentioned, was a real tough one in the first half. But we put that behind us and then we got really good rebound growth in the second half. This year so far, we're making good progress. Sales are going well. There's no sort of headwinds. But obviously, there's always a lot of things happening, as you'd expect, but we're making some good progress. So as David's mentioned, certainly, that target of $300 million or something we're strongly working towards. You can see as well, maybe just to point in each of the graph on the right. I mean what's effectively really happened is we do have that dark blue as chunks of licensing income that tends to be lumpy, and we use that really to offset some of that R&D spend. And then the light blue is the profitability. So certainly, over the last 4 years, you can see it's up and down the bat, but it's relatively flat. And that's really because of the investment in the new affiliates and also the R&D, which we have significantly stepped up investments on multiple fronts. But we are doing that for a genuine reason. And I think if you just give us a bit of time, you will really start to see the benefit of that because really, New Zealand and even Australia is really a small place. That's the point. The world is so much bigger. The opportunity is massive versus just Australia just New Zealand. And that's really what we're aiming at. So look, here's just another slide if you start to split things down, typically, how we sort of look at things as the Australian market the New Zealand market, then we have Asia and outside there, we have international. But you can see looking at it, look at that Australian revenue, look, that's grown really nicely over the last few years this huge ongoing potential in Australia. It's not a walk in the park. It's a competitive market, but we have a very good team. We're one of the largest sales forces in the Australian market, which is actually really important. And I mean if you think back a couple of years ago, I think we were explaining that we had significantly increased our sales force on the doctor side of it. And they depressed a little bit short term, our Australian revenue, and that certainly concerns some people are saying, "Oh, you've got a big problem in Australia or blah, blah, blah." But yes, last year, had rebounded as much as we said, and that grew 60% or 70% of profitability as well as the span. So we were confident that the decisions we made and time were proven to be the right one. New Zealand, look us making really good progress, too, although it's a more mature market, but really when we say that, there's no reason, and Scotia will confirm this, if you talk about us, there's no reason things are going to stop here either. Where's still a lot of potential in the New Zealand market. Asia as well as very much in sort of infant stage. Last year, we did copper but of a hit with Korea with the doctor's strike, which really did stop sales, and we are making very good sales in South Korea. But this year, we're making good progress again and adopters are certainly back at work in South Korea, which is great. But we talk to Korean companies. And like these sales are down like 30%. So it was a real thing. It wasn't just something that was made up. So certainly, look, we're getting good progress. But I mean, long term, what we're tackling is China, which is a particular Yes, it's the second largest pharma market in the world. It does have a lot of complexities. It's not simple either. But we do have some really good staff that work in that area. [ Lorraine ] works up out of Hong Kong and internally, we do have a lot of native Mandarin speakers as well, which certainly makes things like meetings with them so much simpler. Otherwise, if you think about some of the simple basics, it takes twice as long when you have the English-Mandarin and English-Mandarin we latterly say to our people off you go and Mandarin and we leave them to it and they just chip in now and then and ask you questions. So look, that's sort of something that's been really important, David, I mean since diversity, et cetera, et cetera. We have got a staff that pretty much cover every language in the world, all the main languages. And that is really useful in practice once you start to deal with Brazil or Bain or Italy or something like that, it just always helps. So in here, we have a look at our sort of global map, which we've shown you a few times. The areas we're selling in are in yellow. So as you can see, we are gradually getting more and more yellow. The main one, I think this year was probably China. We are making sales in Mainland China at the moment. And then we've got some other big chunks of blue. I mean Brazil is a key project. We're working a lot on. Brazil is actually really complicated, they have their regulatory agency called [ Anvisa ] they don't quite have the same regulatory rules as the rest of the world. So there are quite a few significant differences, but we are working on that, and we are making good progress. We launched in South Africa in Namibia and Mozambique and actually, South Africa sales are going very well. So that's a good example of a market there. And then we have our areas and wait. Look, the main one that we're really focusing on is Japan. So Japan, we have exercised an option agreement with a company. We're working on it, but we really wouldn't cover that in until the option agreement really became real and moved to an actual contract. But certainly, Japanese market, there is some good potential. That's the third largest pharma market in the world. So it's certainly one we are taking seriously. And then some of our other products like Kiwisoothe, we've got quite strong interest out of Japan. So we're working on that as well as our prescription medicines. Then the circles in red. Those are all our affiliates or whatever you want to call them or business hub. So obviously, Australia and New Zealand have been around quite a while. We have an office in Singapore, making pretty good progress in Singapore actually. Then Hong Kong, which primarily there is a reasonable market in Hong Kong. As you know, there's over 7 million people. And then also, that's a good hub for China. Our cross-border runs out of that as well from -- into China and making good progress with our cross-border sales as well. We did purchase a company in South Africa, which has a large pipeline of products. I can fill in a bit more of that on that in the next few slides. Then obviously Europe, we've got our European business is run out of Ireland and our U.K. businesses in London, then in Canada, we've got an office in Toronto. The U.S. is more of an office to run some of our OTCs and to work more closely with our partners, and that's based in Detroit. A lot of work has gone into all of these to get them going. And certainly, that is something that is not simple, but it's set up now and kind of ready to really accelerate it. In terms of our international expansion, I think as we mentioned last year, look, we did have some really big bumps last year with the international sales is some destocking and people ordered up quite a lot the year before. So the graph has actually distorted on the left. That light blue, again, that's the licensing income, which is always going to be a little bit all over the place. But certainly, in terms of this year, we do have quite a lot of license agreements underway. So this year will be a year we'll see some more licensing income, where last year was relatively fairly small basically. And then the number of countries, you can see we're up to 80 countries. So we have had a number of launches. And even markets that we thought maybe were quite modest, like Slovenia. We found actually going really well with selling up to half back to Maxigesic IV a month, which is a very impressive. So some of those markets are certainly performing well. So really, it's just a matter of building and that so makes up the international business, which I think if you watch over this year, you'll see a more significant sales bump in that market, especially comparison of last year for sure. And look, I'd just take you through a quick walk through the different sort of places. So as we said, the U.S., we're really using that to run our OT launches. There's a lot of potential in the U.S. being the world's largest market. It does that just be really clear that our strategy to date has actually been very diversified. So the obvious question you get is "oh, President Trump, oh tariffs, oh, it's the end of the world, isn't it?" No, it's not. Like we -- some of our manufacturing is done in the U.S. So we have flexibility around there. At the moment, only a small proportion of our sales are in the U.S. under 2%. So it's sort of an opportunity, but also too, like if things do go a bit slow, our whole strategy is not based just on the U.S. for sure. that's sort of quite important. And markets like, say, Middle East, we certainly get good sales out of that. In the U.K., we've launched base Combogesic IV and tablets. So we're in boots, superdrug independents, all the main sort of places but I mean, we are scaling that up. We've launched a number of new products this year. We have a pipeline of about 30 products. That's still only partly done. There's a lot of products to come. So we are starting to scale that up. That's our largest single potential market with obviously a population of about 68 million. So yes, much bigger than Australia and only 25 million. So that's pretty important. Then certainly, in Europe, we mainly yes, Europe for selling our own products won't have physical offices all around Europe. We have partners. So Europe is run out of Ireland, and we do have a number of projects here. Our joint venture called Sinoject, which manufactures injectables. We have opportunities to sell those around Europe. We sell Maxigesic around Europe. And then we also -- if you remember, last year, we purchased the German cannabis. It was actually a German cannabis company, for some reason, had some pharmaceutical licenses at [indiscernible]. So we purchased the pharmaceutical licenses. And then we're now going to sell those this year in Europe. But I mean just to give you an idea, like we're buying things. We're not raising money, we're funding it out of profits. And really, the turn we get, I was talking to some bankers the overdone said, well, most of our investments, we get the money back within 2 years. They thought that was quite surprising, but I don't know. That's what we normally do. So that money we spend there, we'll get it back pretty quick. And we've got another offering at the moment for something else. This is not stuff that's like going to change how company we have to announce the share market. But we've got offers for quite a few things, the company in South Africa, we purchased that and all the pipeline. Once again, that was done at a profit, we just quietly did it. So we're not running off and raising money and everything else. I think people don't give us credit for that. We're doing so much out of existing money we're making. And that's probably the reason okay, where the profits are at flat, but we're doing a lot of stuff. We're not growing the money away. And this is what will leverage things kind of long term. So then in Canada as well. Canada actually is an exciting market. I spent a week up there about 2 weeks ago. And the interesting thing is it kind of gets overlooked because most -- a lot of companies saying yes, America, and they ignore Canada. It's too small, it's too boring everything else. Apologies to Ted, but do you know there's 43 million people in Canada. Canada is not a small market, and it's a really interesting market. There's actually often not as much competition. Like if we look at Australia and we look at Canada, having a really good look to me, this seems least competition in Canada than there is in Australia. So it is a very interesting market. And the other thing we've done, too, that's quite important to mention. And we picked this up the other day, we went to an NZTE, their top 25 export companies, which we were one of them. And what everyone said is you don't go hire some junior kid to run your overseas affiliate. We haven't as glad when I hear that, and they said because you need someone who's pretty senior who knows everyone who's probably done it before and then can just do it. The guy we have in Canada is called [ Silvaine ], we're his fourth company. He says probably his last gig, but he set up Aspen in Canada, [ tenant multi ] $100 million company sort of thing and the segments of Africa as well. We've hired this other chap with Aspen as well, setup their better hospital company turned it into a $100 million plus company. So these people are experienced they do know people next to a more kind of confidence too that we can these things work. So that we've got a pipeline at the moment of about 17 products. But hey, look, this is nowhere near enough and we're going to add lots more in there. But that just sort of maybe gives you a flavor that there are things behind. We're talking about the Combogesic launch, which we're just launching now. But there's a lot of other things that will actually follow up as well. And then the other part, just quickly as well with these international affiliates. As I mentioned, we got South Africa. We're launching products within this calendar year. The orders are run with the manufacturers. We put them in the other day, and that's all getting organized. So it was pretty important though to buy that company got us a really good pipeline straight away, and also save us a lot of time as well. So that was important. But we've got about 30 products in the pipeline there, but there will be more. But once again, we got about 30 there. There is a lot of potential, though, we've had our toe in the water in Hong Kong and Singapore for quite a while. But we're seeing some good potential there. Both of those markets, we have at least 40 products in the pipeline. So they are either filed, that dosage are getting prepared to file or the doses are coming. So a lot of work to be done in Hong Kong and Singapore, but certainly getting some really good progress. especially, Singapore seems to be relatively very well structured market. You can probably guess it would be. But we've had some really good success there. And what the Singapore is really like actually they really like the Australian connection. So in a lot of places, Australia, to be frank, is our main pivot point. So a lot of times, you can get products just much more easily if they're approved in Australia. So everything we do we usually register in Australia first. So a very Aussie first, to be honest. But we just do what makes sense for the business. So certainly, the Australian part of our business is important, and we can leverage a lot of these other countries of our Australian site. Now if we look at our existing R&D. I mean what's important, obviously, is R&D cost money so you get your money back, you've got to commercialize it, and that's pretty important. We've got a significant number of deals underway at the moment. We've completed some deals already, which you'll see and we will report our 6-month results. There is some licensing money there, which is always great. So Maxigesic we still got number of different dose forms that we're working on and things like pediatric indications, which are important as well, they really help things like Maxigesic IV by having a pediatric indication, which we're working on. We've just got FDA approval on all our protocols around the IV. So we're doing a study soon on that, and then we'll expand the indication out from just adults to also include children between the ages of 2 and 17. Then we also had new dose forms like we're developing a patented oral liquid formulation, which is of a special interest in the U.S. where a product like that can actually probably sell quite a lot like quite a few millions, tens of millions, and then the pattern would go out to assuming we can get all had sorted out, which we're working on. But just as an example, if you sort of explore there, patent goes out to 2045. And there's a lot of money from something like that in the U.S. that can be made. So that's a sort of angle there rather than just use our standard formulation we're developing an improved formulation, which we would then seek a patent around. And in a market like the U.S., that can actually be quite significant because it literally is such a big market. And then we've also got Crystaderm, Micolette, Kiwisoothe product and our capsaicin product. All of these, we're actually getting interest and licensing, some deals are underway, some are being signed. And so those are underway and be filing a number of those dossiers in Europe as well. We really have some registrations like Crystaderm. We've launched that in Canada and China. So there's a couple of markets that I said we will be other markets as well. The sort of complicated maybe one, but actually, to be frank, the most important one, is the whole R&D pipeline. This is getting quite reasonable in size now. It's carefully balanced too that we have some projects that are quite close than other projects that are a bit further out. What we've tried to do share a bit more information, I guess. So you can see we've got a column in the middle that says dossier filing. So really, once the dossier gets close to filing, it's particularly suitable for licensing. So you can start to get the licensing money in the door. Then typically, it will take 15, 18, 24 months from filing to then launch it. But often quite quick, it can be 15 months, then you'll get the sales will then start to build. So we've done a number of things. So in the first line, hospital injectables, we have a significant joint venture with a 70% majority partner for that. It's called Sinoject. There's a lot of potential for that. We believe it's about a $450 million target market, and we had some really good competitive pricing and things like that. I mean one example, there's quite a popular product that the cheapest we get it for is about USD 8. We can make it for USD 2. There's some interesting things that flow off there, and that's something that can also make money kind of more quickly. It's not as sophisticated as the ones further down, but it kind of balances out, we want to make some money now. We're also doing a migraine product, an improved migraine product. target market for that is about USD 180 million. So that's closer with probably either the end of next calendar year or the start of the year after. So that's reasonably close. Pascomer for port wine stains. This is where people get a port wine stain growth in their face, what they do is laser them off. Problem is they grow back. And this, we believe, will slow -- there's data to show it slows down the regrowth. So we're just undertaking clinical studies for that one. One of the most exciting ones is this iron injection. So that's -- this one is a new chemical entity. We've done a deal with the people we work with at Hyloris in Belgium and another company pay with the original people that developed that. So we got 45%, Hyloris, 45% and the original company maintains the balance. Now injectable iron is popular growing market. It's about USD 3.5 billion at the moment, growing to over $7 billion. This product, we have got the first lot of clinical data back and actually, to be frank, it's really exciting. This is a valuable market. Like just to give you a flavor, DSL, a company in Australia, he's probably heard of. They bought a comp [ Vifor ] in Switzerland. Now they wanted stereo teamed away from justice blood products. They bought Vifor for multi billion dollars, about just under USD 12 billion. One of the reasons they bought it was as they had 9 injection. So the iron injection was about 38% of their sales, and they paid just under $12 million for the whole thing. So obviously, they thought the iron injection was worth summing. Our product, the first study we did was against that product, which is the current market leader for the iron injectable market called [ Ferring ]. There's one sort of quiet -- I mean, I'll just give you a flavor without telling you the exact thing because we're filing of the patents. But for instance, there's 1 side effect that's quite important. We were 1/15 of the incidents. So this drug is really good. The problem with iron is it's not that well tolerated. It actually is in some ways can be quite dangerous. And this product, to me, is very interesting because the data we got to date shows us really well tolerated. So -- that's a project, but it's not a simple 1 either. We're going to do -- we've been the FDA already. We're going back to FDA about the end of the year. And then next year, we will roll into an 800-patient clinical study. So this is the sort of thing we can tackle. Our team is well set up for this and audited by U.S. FDA. We passed with 0 observations, which is almost unheard of. So we know we're doing things properly. So the injectable iron is, to me, a very exciting project. But then look, we've got other projects as well. We've got an antibiotic eye drop for drug-resistant infections. This product is very much needed. In the United States, they compounded a lot at the moment. The problem is the FDA hates compounding. Eyedrops is something you don't want to compound anyway because of some pharmacy contaminates it think you're going to have a problem. I say this is a good target product for that sort of thing. So we're developing that. Strawberry birthmarks is another interesting project. So there is quite a big market at the moment where there's an oral treatment. Problems is quite toxic. So they don't use it in a lot of the patients they could use the -- so many of you think about it, if your city or grandchild is born with a few strawberry birthmarks on then you quite like them to go away, run of them. At the moment, the only treatments are quite toxic. So we developed a topical treatment, and we're just going the FDA think about next month or next couple of months, don't we literally, yes, next couple of months to have our first discussions with U.S. FDA. But even the market at the moment, which is quite restricted, is still -- they say the estimates from the expert report save USD 650 million. So we see this will be an opportunity to expand that market. And then also, we've got something for keloid scars and another topical treatment. Keloid scar mark is big. If you look at the data, there's no approved medicines over $1.5 billion presently. A lot of potential. Keloid scars or scars that keep growing. So you think about it, the scar held up, and you forget about it for a while, but a problem with keloid scars is they keep growing. So there are no treatments, but they surgically excised them some lines they use injections on to them, but there's no registered treatment. So we have some good data around that, and we're developing that as well. Then also something called burning mouth syndrome. And look, even there's no approved treatment for it. But even around that, even just the diagnostic market and sort of handling that spot without a treatment is USD 460 million. So it's not a small market either. I think the point getting back to what David made as well is, look, a lot of these things like big pharma will go for the latest cancer treatment. Nothing wrong with that. Obviously, that's important. However, these sort of things are going to the mall, they're not really worth that we can't be bothered thing, but you can see they're not smaller markets, and there is really good potential and patient real patients need them. So we're making money out of selling our other products. We're investing x amount into new affiliates, x amount back into this. And -- but there is a big bang and a big upside as long as we can get it right down the track. So we've had some experience to date. We've got 2 U.S. FDA approvals. There are a lot of companies in New Zealand, you'll find will talk about these things. The thing that was really key honestly, was meeting someone like [ Doug ]. He was the only guy apparently to the day they got 2 drugs approved by U.S. FDA on the same day, 2 patented drugs. Doug was very clever and he knew it. He's done it, and he was so helpful he made a big difference, to be honest, we were like sponges, we set everything up off Doug, and that was quite important. So we've learned a lot from them, and that is important. Then there's another disease once again that VLS, affects females, obviously by the name. Look, that's a pretty big problem as well. There aren't any treatment. So we've got a development there once again, we're doing that with Hyloris that we work with in Belgium, but that's a good potential one. And last, we've got our NasoSURF project, which has gone a bit slow, and we are working on some problems with it. But with the whole thing, there's always been something I should point out on that list that probably won't work, but that's why we have a number of projects. We are sort of maybe looking at another 2 sort of projects sort of thing but we're focusing on getting a few things in that would be a bit quicker the market or not sitting down the bottom, we want ones that will be in the middle. So it's not like I never, never think your eyes glaze over, you think, God, it's going to be 10 years time because we're the same. We don't want it to be for ever. So look, hopefully, that gives you a bit of an idea about the R&D pipeline. We're excited about it. We honestly don't think the market's got it. But whatever that we still believe that's a good investment. It's money we spent. And last but not least, just to finish up with the outlook. To be honest, this is very much the same as we said, at the end of last financial year. We're definitely looking to extend our growth record. If you think back to that sales graph, sales are roughly doubling sort of every 5 or 6 years. We're not really looking at them slowing down. Like just because we're selling quite a bit, we still think there's a lot more potential which is why we set up those affiliates, and we have the R&D program going. So we're certainly working on that. The target of $300 million. All the team is working hard about that. I mean, people say around the office is a good buzz people sort of think that's pretty exciting. There's lots of new things happening, new products happening and things like that. But the old products are going well as well. Because often what happens, we've noticed is people sort of almost read the wrong thing. And the things like people say, "Oh, that you're only launching new products because the old products aren't getting sold, are they?" No. Products are growing nicely, but the new products are going to help. And then the other thing people said, I can remember as they said, like when we floated, they said, "Oh, yes, but you're going for the international because Australia and New Zealand are kind of topped out having the and they're not really going to go anywhere." That was 10 years ago, but no. Australia and New Zealand has gone a lot since then and will still grow more. And so it's really this geographical spread is really important. The strong program for new products. Both products were in licensing. There's lots of interesting products around the world, you can then license and we're definitely doing that at the moment. I mean, look, one simple example is a product tranexamic acid mouthwash. If you go to the dentist and you're on a blood setting agent, you have to stop that at the moment because the problem is that they do as -- they take a teeth out of something, you can keep bleeding. [indiscernible] mouthwash will then be able to use it, and you won't have to stop your blood because the mouthwash will stock be bleeding and you carry on the blood thinner. Look, it's not rocket science, but it's a nice useful product that people are going to use. That's the sort of thing we license in. So we've got quite a lot of products like that we're licensing in. Then we've got the growth, as we're saying. And there -- and look, we're still maintaining our sales are going well. We're not -- don't have concerns around that, and we're keeping with that $20 to $24 million. But look, that's -- we'll update you if there's any changes in that. But yes, no, look, that's progressing fine. So thank you very much, and I will hand it back to our Chairman. Thank you.

Okay. Thanks, Hartley. So at this point, we're going to open up the floor for questions on the latest results, a business update or any other matters you'd like to raise. Directors and senior management will also be here at the end of the meeting to answer any questions you might have well for having refreshments. So any person who wants to speak or ask a question, could you raise your hand? Please, could you state your name prior to asking your question? And also, please wait until you've got the microphone. Otherwise, those people who are online won't be able to hear your question. And I ask it in the interest of fairness to all shareholders, anyone wishing to speak should be as concise as possible and be considerate to other shareholders as well. So opening up the floor now for any questions, please. Sir?

My name is Brett Boyce. Could we just touch on the shares of -- the share thing. Some of the issue about this year is in the liquidity, I think there's certainly something there. And I'd like your sort of comments on that with a major shareholder, you've only got 30% of your share base gives you your liquidity to give your pickup. You can overcome that in a way maybe reducing your share if you were considering doing that. if you could take on board the fact that retail investors are often undersubscribed and stuff like that instead of going institutional and then retail is the way to go I think. And secondly, things like dividend reinvestment programs for shares, you get your capital back. You get to retain your capital or your R&D as well. Are there any sort of thoughts on that?

Sure. Thanks for your question. Yes, we do hear that comment about liquidity a lot, obviously. Actually, if you go out and buy shares, you can buy them. They are not unavailable. The shares are available. So hardly, for example, has just bought some more shares has been disclosed to the market. Quite a number of shares had no problem buying them. If you want to go -- if any of you want to go into the market now and buy shares, they are available. So the liquidity is not as much of an issue as people think it is because you can go out and buy shares, and that's what liquidity is all about. In relation to the dividend reinvestment scheme or possibility, I mean we've only just started paying dividends through this is our third year shareholders, we understand do want dividends. We are in a position, fortunately, of being able to pay a smallish dividend as well as reinvesting as well as making a profit as well. So we think we've got the balance right. We obviously keep an eye on it all the time, and we will continue to keep an eye on it, certainly. Thank you for your question. Sir?

[ Tim Fermont ]. I'm a shareholder. Some of the most important people in the business will be our salespeople. Can you just explain a typical salesperson in Australia. Would it be working out of an office where to be just managing AFT products or where they'll be working with other products? And I guess they'd be a good commission, good for top sales people.

Yes. No, look, thank you. That's a good question. Basically, our sales team in Australia is split around sort of customer. So we have a pharmacy sales team at 25. We have a doctor team of 11 or 12. We have a hospital team of 3 or 4. We have merchandises then we have key account managers who handle the offices like Chemist Warehouse or something like that. I mean, typically, there's quite varied, but he's probably a science graduate sort of thing. And they only work for us, so not doing anything, any other person's drugs that totally our sales force, which is really important. Everyone has an incentive scheme. It's pretty typical in the industry. It's probably 15% to 20% sort of thing as an incentive thing. We're certainly paying -- we always look at this carefully. We're paying pretty much as the rest of the industry. We're not paying people less. Our people are well paid. We have a pretty good retention with our sales force. We've had reps there for years and years. We cover every Australian state New Zealand. We have a spread as well, which is spread out over the whole country as well. So trying to keep the amount of travel to having some local people like WA, we have 3 pharmacy sales people and sort of WA. So that's pretty important. So yes, no, look, it's having that coverage. And to be honest, we have very good salespeople like -- and it's pretty well organized. They have computerized call systems that logs everything. There's no hiding or anything like that. Now with those sort of systems that is some -- and it's definitely got investment because the key is getting a product on shelf, educating pharmacists, presenting it to doctors, all those sort of things. Doctors are really important like we sample a lot with doctors. That's also very important. And it definitely helps for having salespeople to be there. Hopefully I've answered your question.

Hello, everybody. My name is [ Yuri Schultz ], unhappy shareholder with 1 comment and 2 questions. Firstly, after I would have expected a little bit more self-criticism rather than self laudation overall after the, say, 5 9-year performance, if you look at the chart, that's comment. Otherwise, 3 questions, please. I heard in the site sense that you're producing something in the U.S. I thought your production centers are in India, in China and in East European country. Maybe you can comment on that. Second, at the very beginning, it did you say that you start with quarterly reporting. It was also in a site sentence. If so, what is the depth going to be of these reports or whatever you intend to publish, please? And number three, Hartley, can you please comment a little bit more on the first month, how this is going, the magnitude of growth? Is it -- I mean, obviously, it's consistent with your current guidance, otherwise, that would have been an announcement. But is it building a bridge to the 300 a little bit? Or maybe you can comment a bit more on that, please.

Yes. Okay. First of all, your comment on self-criticism is fair. We're all in the same boat here, we're at this point with the share price. But I mean we can't control that as much as we'd like to be able to control it more but I mean, as I think I showed last year, our revenue has grown -- has quadrupled since we IPO-ed in 2015. From $50 million, we're now over $200 million, and we're looking to $300 million. So we feel good about that. We feel good about the work we're doing. We feel great about the pipeline. We would like to see the share price follow. That's a fair comment. One other one I'll respond to, and then I'll hand over to Hartley is on the quarterly reporting. So we've decided rather than -- I mean, we have so many new products coming in, things happening, which on their own are not really -- are not price sensitive, so we're not going to the market on those. We do sometimes or we were providing announcements to the market on a reasonably regular basis, which were not price sensitive, but it was a way of getting our message out. I guess we're thinking that the shareholder letter that we're sending out now provides a more regular update to shareholders to let them -- to let shareholders know kind of what we're doing. So that's -- we've only started, I think, this year. And -- but we will -- our plan at the moment is to continue to do that. Yes, it's not an announcement for the -- it's not a price-sensitive market announcement. If we're updating forecast or anything we have to go through the normal and ASX channels. Hartley, do you want to answer the other one?

Yes. I was trying to remember the question.

Production centers in the U.S.

Yes, production centers. No, look, we do produce globally, to be honest. -- we produced quite a lot as you're not necessarily Eastern Europe, like Italy is quite major, Spain and Italy, Germany. So we have spread there. We do manufacturing in the United States presently. So we have got that option. We don't love working with the U.S. manufacturing sites presently for various reasons, I probably won't go into. They're not that easy to work with. And then we work in Canada as well with manufacturing sites. So to be honest, we have a spread is the answer. So I mean we -- I still think it's ultimately fairly difficult the U.S. says he wants to get all this manufacturing onshore, I'd like to challenge that would be very difficult in reality. But we do manufacturing in the U.S., so we do have that opportunity as well. trading update. Look, I mean, I think, as I said, we're going well. We're pleased. I mean, the growth is as we would have expected. I guess we're trying not to release sort of like quarterly numbers all the time. There is a reason really that you see when companies are quarterly reporting, you always get too driven by all those short-term things. As we try to say, we are focused on really driving the long term. So we're trying to avoid our guests releasing the exact trading numbers every quarter. But what we can say is lots are going good, fine. And yes, I mean, people often ask about the economy and so you won't be going very well will because the economy is not very good in Australia or something. It honestly has very little difference on drugs as someone's got a headache, they don't think the economy is no good. I'm not going to go buy my headache medicine. But if they're going to buy a new Ferrari or something they probably take twice, but things like drugs and pharmaceuticals very resistant to economic cycles fortunately.

Any other questions? Sir? At the back.

[ John Hume ], shareholder. Are any ore products covered by PHARMAC? And the other thing is your Maxigesic for pain relief is Panadol your main opposition to that because I was just wondering why I haven't seen a doctor prescribe Maxigesic instead of Panadol. I just wondered, are you covering private practice doctors enough to get them to be subscribing your product rather than Panadol?

Sure. I'll have a go at that first, and then -- PHARMAC, yes, most of our hospital products through PHARMAC, but they can comment more on that. Maxigesic, well, no, I mean, we are -- Maxigesic is a combination of paracetamol and ibuprofen. It is -- I mean, test has proven, and we advertise it this way. It's a stronger pain relief than paracetamol. If your doctor is not prescribing Maxigesic, you could tell them you would like him to suggest that Maxigesic is a more effective pain relief than paracetamol.